Member
waitingforamiracle
Posts: 9
Registered: ‎03-30-2010
Re: Student Loan Forgiveness Act of 2012
The student loan forgiveness act also includes being placed on an income based repayment plan. Basically, your payments are calculated according to your income and you have to reapply every year because your income may or may not change. Sounds good, right? Well I have recently applied for a FHA mortage loan, I have a decent credit score and very little debt but because I'm on the income based repayment plan under the student loan forgiveness act, my loan application was denied. Why? Because a bank will not lend money to folks who are on a payment plan that changes every year. I was told by my lender that their bank needed verification I would be on this plan, paying the same amount for more than 1 year and of course Direct Loans can't provide that information. If my lender uses the full monthly payment amount instead of the lower income based monthly payment amount, my debt to income ratio is too high to qualify for a mortage but they refuse to use the lower payment. I'm a school teacher so my income will never increase substantially....I'm pretty much stuck renting forever.